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So far high bang on SPY and ES1 YR1s, but remember the market is above SPX and ESU YR1s that may hold as support. We'll see which version wins!
In other news, the best rally in safe havens TLT and GLD since the 7/6 highs, and a decent enough reversal bar in VIX.
Hm, an interesting dilemma using this method. Why? If you look at SPX cash index or ES current contract futures, they are above the YR1, massively bullish and set to go higher. But if you look at SPY or ES1 continuous contract, the high is bang on YR1 and looks like drop is more likely next move. We'll see what happens!
SPY, SPX, ES1, ESU all below.
SPY doing fine - digesting the rally by moving sideways is bullish. QQQ held, but IWM and NYA both dropped back under Q3R1s. We'll see what happens tomorrow.
Several +s today:
SPX closed above its YP 2163; the second time with a close above the level (7/14 was less than a point, but still above)
QQQ, IWM and NYA all closed above Q3R1s
EEM launched from its YP, the 3rd consecutive day above
All these are bullish for risk assets
?s are:
INDU stalling with YR1 just above
ES1 continuous contract YR1 still exact on the high (the only version of the SPX set where the YR1 is currently above the price)
-s:
Sentiment getting up there now -
Daily put-call 10MA near the April 2016 lows, which were the lowest in 2 years
AAII managers also much higher exposure and if considering not Nov-Feb then even more relatively high
And today, ISEE closed at 156, the 2nd highest value this year. Most recent high spike was 138 on 6/8... yup.
Until the market is entirely taken over by machines, the crowd is usually bearish on the lows and bullish at the highs.
I think chances of some shakeout have increased... the big levels are INDU set YR1 and SPX set YR1, still close enough to be in play, and this is even more the case as daily RSIs near 70.
SPY, SPX, ES1 below.
SPY looks rather fine here, not quite tagging YR1 yet holding Q3R1 as support. SPX while it closed back under YR1 2163 does not look threatening. More in the full USA main index blog post soon.
Amazing rally continues, SPY above Q3R1 looking like test of YR1 immanent. Safe havens back down too. So far everything points to "have bought and holding" (instead of hedging or taking profits). But watch the SPX YR1 2163 on Friday.
When the yearly pivot held on INDU on 6/27, and broke slightly then recovered 6/27-28 for SPX, I never dreamed we would see a tag of YR1 in July. But that's how it played out, with SPX reaching YR1 in just 12 trading days. The move from the YP break in January down to YS1 was fast too, just 6 trading days; then after some chop the recovery of YS1 in later Feb rallied back to the YP in just 18 trading days. Outside of these moves the market is a lot of sideways! If you snooze you lose - the big levels are the places to take significant positions.
SPY and SPX below. (SPY YR1 is higher largely due to the 8/24/15 spike low).
View of today changes per index: SPY looks like pause at resistance, DIA even more bullish with close above resistance, but QQQ more like rejection.
The concern is that safe havens TLT and GLD came roaring back. Continued safe haven strength would more likely turn this 7/13-15 timing window into a stock trading high. At the same time, one intraday sentiment meter was at a bearish extreme (everyone worried about a top already). So we'll see how all this shakes out.
Of course, if you are following this method you were cutting longs significantly 6/24, buying back partials 6/27, adding back significantly 6/28 and then full long 7/5-6. So we are deciding what to do with those longs - hold, hedge or take profit? I lean towards #1 or #2, but will be more inclined to #2 with clear rejections and continued strength in safe havens.
SPY, DIA and QQQ below.
SPY tagged Q3R1 / JulR1 combo today, a very fast move of only 5 trading days from holding Q3P / JulP exact on 7/6. As it turned out, DIA, QQQ, IWM and VTI all tagged their Q3R1 / JulR1s too.
Is this a trading high?
Well, there were definitely major highs in 2015 (and other years) when multiple USA mains reached quarterly resistance levels. But let's put the move in context. Major indexes just broke out to a new high, most after 1 year or more. Safe havens are coming down hard. Aside from intraday timeframes (and quarterly charts), nothing is overbought - meaning daily, weekly and monthly charts all room to move up per RSI. We aren't seeing sentiment at toppy extremes yet, nor are we at a valuation level per the recently revised method. We do have a timing window of 7/13-15, and sometimes these are +/- 1 day, so maybe, but...
Although all 5 USA mains are at resistance, my bet is slight pause or consolidation move, or higher. In other words, don't sweat it.
Also: Did I just get the bond top?
7/6: "Interestingly, as "analysts" are starting to sound calls for TNX 1.0 (the % not a computer program version), I am increasingly wondering about a major turn in bonds based on major levels and RSI. TNX came very close to reaching YS1 today and remember the big turns that seem impossible happen on the big levels, just like the USA stock low of the year on RUT YS2 exact. Remember, resistance levels are better used as profit areas on longs instead of shorts - but if you want to take stabs at speculative trades (ie short above all pivots), then multiple RSI extremes and levels are the place to try. Watch reactions on these levels: JulR1 reached today, then Q3R1 just slightly higher 143.64 which would be a good tag area for a setup. If above that then I'll start thinking 2HR1 / YR2 combo 145-148." (TLT high 143.62 so far.)
7/9: with TLT closing at 143.59 on 7/8: "RSI in historical extreme area and some reaction down more likely. Daily chart already at Q3R1, with RSI fully OB (overbought) every day this quarter so far. Pushing higher despite the move in stocks on Friday is quite remarkable. From here a move to 145-148 looks very doable, but I'd kinda rather see a shakeout with a reaction down from this Q3R1 first."
SPY and TLT below.
Slight pause at ES YR1 2132 as suggested as possible in the latest USA main index write-up. "Priority to the bullish view of the cash index and ETF, but it still may pay to watch ES 2132-46 for a near term reaction." DIA also reached JulR1. Both of these suggest some near term consolidation move.
However, TLT and GLD rejections from Q3R1 should be supportive for stocks.
SPY, ES, DIA and TLT below.
Yesterday: "Waiting game for the jobs number but if IWM and XIV are correct then stocks will be higher on Friday."
Do you see why I said that? Because they both rallied late Thursday to close above their Q3Ps. And right they were!
SPY, IWM, XIV below.
Waiting game for the jobs number but if IWM and XIV are correct then stocks will be higher on Friday. We'll see!
SPY, IWM and XIV below.
Yesterday: "Most USA mains don't look too bad here, dropping on to Q3P / JulPs and so far holding as support. After hours, ES is even closer to testing the level. ... SPY below the Q3P would probably be trouble."
Well you didn't have to worry because SPY ES SPX all held their Q2P / JulP combos near exact for a decent rally off the lows. Yet I'd feel better about the rally with IWM and XIV above their Q3Ps.
Last week the key buy was very near the INDU YP as SPX set broke their YP slightly and recovered. This week the key buy was the Q2P / JulP combo. See the pattern here?
Interestingly, as "analysts" are starting to sound calls for TNX 1.0 (the % not a computer program version), I am increasingly wondering about a major turn in bonds based on major levels and RSI. TNX came very close to reaching YS2 today and remember the big turns that seem impossible happen on the big levels, just like the USA stock low of the year on RUT YS2 exact. Remember, resistance levels are better used as profit areas on longs instead of shorts - but if you want to take stabs at speculative trades (ie short above all pivots), then multiple RSI extremes and levels are the place to try. Watch reactions on these levels:
JulR1 reached today, then Q3R1 just slightly higher 143.64 which would be a good tag area for a setup. If above that then I'll start thinking 2HR1 / YR2 combo 145-148.
Lastly, the other interesting thing we saw today was biotechs leading. It has been almost a year since that has happened! IBB tried to clear its Q2P 3x in Q2 only to go back down to test the low. Today is another try above a QP - is this the charm?
SPY, IWM, XIV, TLT and IBB all below!
Most USA mains don't look too bad here, dropping on to Q3P / JulPs and so far holding as support. After hours, ES is even closer to testing the level.
But IWM so far rejected from the more important YP, and XIV dropping from Q3P, as safe havens continue to soar. SPY below the Q3P would probably be trouble.
SPY and ES below.
SPY above all pivots. Totally appropriate to hold recent longs above the Q3P of 206.88, and a target zone of about 215 to 217.65 includes the Q3P and YR1.
You know you have a method that works when a statement made mid-March applies almost perfectly more than 3 months later.
From 3/12/2016: "Bull alive and kicking above 17138 (the highest of the INDU pivots, the Q1P) and still more likely than bear with INDU above its YP at 17048."
Monday 6/27 low was INDU 17063, just 15 Dow points from the YP.
I have seen this before - whether it is end of QE, Ebola, or Brexit - if the leading index holds a long term pivot, the trend is alive.
From yesterday 6/28: "When factoring in VIX, the last time we had a day like this was 2/12: a big drop down from the YP (or near enough) in combination with holds & recoveries on several major indexes. Now this time could be the key buy for the rest of the year, or it just be a bounce before a failure. But near the big levels when VIX confirms is usually the place to take a stab."
Stab long that is. Most aggressive buy on 6/27 based on VIX and focusing on any index that was holding pivots relatively better would have gotten you long on: INDU on USA mains, MDY midcaps on other USA, then SOXX and SPY; also oil based on CL1 continuous contract perfect hold of YP, and EWZ, then maybe some RSX.
A fund could have made the quarter on aggressive trades off these levels the past 3 days with DIA +3.7%, MDY +4.4%, SOXX +5.4%, SPY 4.0%, CL +8.8%, RSX +6.5% and EWZ topping them all with +9.6% in 3 days!
Same 3 charts as I've been posting all week below: SPY, INDU, VIX.
And that was a major league hold! Yesterday I pointed out the big levels - SPX and INDU set YPs along with VIX YP. Monday's low was 15 INDU points above its YP level, a near perfect hold. And this time VIX got it right, closing below the YP yesterday despite stocks dropping much more.
When factoring in VIX, the last time we had a day like this was 2/12: a big drop down from the YP (or near enough) in combination with holds & recoveries on several major indexes. Now this time could be the key buy for the rest of the year, or it just be a bounce before a failure. But near the big levels when VIX confirms is usually the place to take a stab.
Same charts as yesterday: SPY, INDU cash and VIX.
That was fast. As of the weekend posts I thought the SPX set would likely test YPs soon and here we are one trading day later.
The market has reached crucial areas. I know you may read this kind of thing often in other technical analysis but with pivots when I say this I mean it. Big levels in play from here all within 1% give or take:
SPX, SPY, ES YPs
INDU & COMP, DIA, YM YPs
VIX YP
The market can go weeks or months without trading near a yearly or half-year level. Yet also consider the damage of the past few days:
NDX & COMPQ, QQQ and NQ YP breaks
NYA YP break, VTI YP slight break
RUT, IWM and TF YP rejections - this was the big tell!
Meanwhile, 2 safe havens are continuing to soar with TLT and GLD well above YR1s.
I have said from March that the bull is alive and kicking above 17138, its Q1P at the time, and "more likely than bear with INDU above its YP at 17048." So this level really must hold for a hope of a bullish resolution here. And though this is the most important level, most USA main indexes likely to open below 2HPs, Q3Ps and JulPs that will be in play from 7/1.
SPY, INDU cash and VIX below.
Whoa. Of course I"ll have a lot more to say in the weekend posts, but that was a shocker.
For the second time this year, investors have woken up to a painful gap. That said, 12/31 gave decent sell signals before the 1/4 fiasco so that was just a matter of taking eyes off the ball. However, on 6/23 markets really looked quite healthy across the board.
If you kept a cool head, saw all kinds of pivot breaks along with VIX above the Q2P and realized it was time to scram, you had a chance to exit any longs near JunPs. In fact the JunP was near exact session high on DIA & YM, and ES too.
SPY, DIA and VIX below (SPY looks like a truly bad tick because on the 15 min chart the high is just under 207, not above 210 as shown below. However, DIA is accurate.)
Well it looks like the market will be truly surprised on Friday. As of Thursday close there was nothing in USA indexes, bonds, gold, VIX, etc, to suggest what we are seeing after hours. To the contrary, USA indexes and VIX looked like a screaming buy. Alas.